Construction of a mega mall that was set to be Laos’s largest shopping complex has been suspended after the project’s international developer ran out of funds despite having collected advance rent from retailers, sources in the city said Tuesday.
The planned U.S. $50 million Regal Mega Mall was touted as a landmark center for commerce and entertainment when construction on the seven-storey shopping plaza began last year in the Lao capital Vientiane’s Sikhottabong district.
But now its developer, Regal Global Investment Development Group, a Singapore company, has halted the project while it looks for another investor to take over.
Regal Global had started building with initial capital and had expected to raise more funds from merchants leasing future space in the shopping plaza, but failed to collect enough to continue with construction, a Vientiane government official said.
“It’s halted temporarily because they [the investors] are struggling with money,” he told RFA’s Lao service, speaking on condition of anonymity.
“They use the money of lessees. They have collected money from lessees, [but] now they can’t continue,” he said.
The investors will have to return the money to the merchants in accordance with the law if the project is not completed, he said.
Regal Global began allowing merchants to pay for future retail space in the 120,000 square meter (1.5 million square foot) mall after a public launch in September last year.
The mall was slated to be completed in 2014 with over 1,000 shops including restaurants, a children's playground, a video game arcade, a cinema, and a hypermarket.
But now, store merchants who paid to reserve their spots have not been informed of how, or whether, they will get their money back.
One merchant in Vientiane said the company had not explained how the construction halt would affect those like him who had already paid for future space in the mall.
“They said there is a problem about the investments, but we don’t know the details yet about who will take responsibility,” he said, speaking to RFA on condition of anonymity.
At the time of its public launch, the mall had generated interest among investors from Laos, China, Thailand, Vietnam, and Malaysia, according to the Vientiane Times newspaper.
Regal Global—a comprehensive international investment and development company with shareholders in China, Taiwan, Singapore, and Hong Kong—is also developing a five-star hotel in a joint investment with Laos’s Ministry of National Defense, according to paper.
The Rasavong Hotel, a U.S. $100 million project in Xaysetha district, is expected to be the country’s largest when it is completed in 2014, the paper reported last year.
Reported by RFA’s Lao service. Translated by Bounchanh Mouangkham. Written in English by Rachel Vandenbrink.